Rackspace (RAX) to be taken private?

San Antonio based cloud computing giant Rackspace (RAX) saw its share price soar more than 13% Friday morning following reports that the company is discussing a possible sale to private equity firm Apollo Global Management. According to Reuters, if the deal goes through it could be a transaction valued at more than $3.5 billion. The company’s primary business involves leasing server space to organizations. Last year it realized gross revenues of $1.3 billion and a net profit of $122 million. Rackspace is expected to announce its second-quarter earnings on Monday.

** Thu Shares of data center hosting outfit Rackspace Hosting (RAX) were halted just before the closing bell, as headlines came across the Dow Jones wire that the company is in “advanced talks” with private equity to be taken private, citing multiple unnamed sources.
The shares had risen $2.93, or almost 13%, to $26.09, before the halt.

RAX one week later

An internationally diversified investment group, Apollo Global has carried out a series of high-profiled acquisitions this year that have resulted in the privatization of several once-public companies. Earlier this year, the company bought security firm ADT Corp for $6.9 billion, making it the largest leveraged buyout for 2016. Most recently, Apollo acquired Diamond Resorts International (DRII) in June for $2.2 billion.